Finvarb Hotel Proposal at Odds with Sunset Harbour Neighborhood Vision Plan

Susan Askew
Susan Askew

Finvarb Hotel Proposal at Odds with Sunset Harbour Neighborhood Vision Plan:

Developer seeking exception to draft ordinance prohibiting hotels

The Finvarb Group wants to build a hotel on recently acquired property at the edge of Miami Beach’s Sunset Harbour neighborhood but those plans are at odds with a Neighborhood Vision Plan (NVP) developed by the Sunset Harbour Neighborhood Association. The NVP, which includes a prohibition on hotels in the newly created Sunset Harbour Overlay District, has been incorporated into a draft ordinance now before the Planning Board.

Developers Ronny and Richard Finvarb opened the Kimptom Palomar Hotel in February 2020 and, despite “a very difficult year,” attorney Mickey Marrero of Bercow Radell Fernandez Larkin & Tapanes said, “The hotel has been able to jump back. It’s now doing well.” 

With that success, the Finvarb’s SOBE 18 LLC purchased a triangular lot at 1790 Alton Road across Dade Boulevard from the Palomar with a plan to develop the Kimpton Palomar Suites.

At last month’s Planning Board meeting, Marrero sought an exception to the draft ordinance to allow the Finvarb hotel to proceed. At the time, Marrero said his clients were in the “hard” stage of the purchase contract with a non-refundable deposit, had an agreement with Kimpton to operate the suite hotel, and were well into the design process based on current zoning law which does allow hotels on the site.  

According to the developers’ timeline, they began looking at the property in October, entered into a purchase contract on November 19, then after conducting due diligence and meeting with City staff they were comfortable they could develop a hotel on the property. An acquisition loan was approved in mid-December and the contract went “hard” on February 1. Marrero said the first Commission discussion regarding hotel prohibitions in the area did not occur until February 10.

The location of the proposed hotel is on two “highly trafficked commercial roads,” Alton Road and Dade Blvd, “at the very, very corner of the Sunset Harbour neighborhood, where intense development has always been sought,” Marrero told the Planning Board, “[and] its distance from residences is great.”

The Kimpton Palomar Suites would be a “complementary use to the Palomar across the way, catering to the same type of clientele that would want to use a Kimpton Hotel and might stay at the Palomar but they might need a little bit more room because of their family or perhaps they’re staying a little bit longer because they’re a business traveler and they need the additional amenities that a larger room might provide,” Marrero said. A restaurant is planned for the ground floor along with “lush landscaping” and a “serene guest experience.”

In suggesting the exception for a hotel within the proposed Sunset Harbour Overlay ordinance, Marrero said, “There was reliance getting to this point where our client had expended significant funds before the inception of an idea of prohibiting hotels even came about.”

“Not only are we providing what we think is a wonderful product and, hopefully, something the neighborhood will be really proud of,” Marrero added, “but also our client relied strongly on the long-standing zoning that at no point in the past and up until now had considered prohibiting hotels.”

He addressed any concerns with spot zoning by arguing that prohibitions on spot zoning apply to individual properties being zoned into a different category, not the case with the Finvarb exception request which would treat a property differently due to a geographic boundary but with the underlying zoning remaining the same.

Residents and members of the Sunset Harbour Neighborhood Association objected saying the NVP seeks to create economic opportunity for the area that will enhance the neighborhood through development of Class A office space. The conversations began last summer as the City sought ways to diversify its economy away from a heavy dependence on tourism and hospitality. When a blanket ordinance providing height incentives for Class A office space was proposed for Sunset Harbour, the neighborhood worked with the City on the Neighborhood Vision Plan which has since been incorporated into the larger Sunset Harbour Overlay ordinance.

Ronny Finvarb said, “We are long-term owners, long-term neighbors, long-term developers and investors in Miami Beach. We are truly proud of our community and we think that we have added some great projects to the community that have only complemented the community and not taken away.”

“We are also very prudent developers and investors. We go through the exercise of checking all of the appropriate boxes before we make an investment,” he said. “We’re not the type of developer that’s looking to squeeze out every last room or seek a variance for height or do things that neighbors can be concerned about. We’re doing the opposite here, going with the larger room that’s more upscale than the current Palomar. We’re going with an iconic design that would not ordinarily be approved at this location. Kimpton would not normally approve a location that is surrounded by an Office Depot, a car wash, a vacant Michael’s, but they’re doing so here given the relationship with us, given the proximity to our Palomar and given the iconic design that we’re going with for this project.”

“We were born and raised in Miami Beach,” Finvarb continued. “We’ve been longstanding members of the community and we’re looking forward to continuing to enhance the community and benefit our neighborhood. Unfortunately, here, we were caught in the crosshairs of something that was never even discussed or on the radar as far as a hotel prohibition. If it was, we would have chosen not to go hard but we did and, hopefully, everyone on this meeting can appreciate that and can appreciate that we are trying to bring something to this corner that will benefit and not take away from the neighborhood.”

Ultimately, after several members raised concerns about the reliance of the developer on current zoning law, the Planning Board continued the discussion until its April 27 meeting and encouraged further discussion with the neighborhood to resolve the issue.

Since then, the Sunset Harbour Neighborhood Association (SHNA) has doubled down in a letter to the Board.

Calling the Neighborhood Vision Plan “a remarkable effort by both the City and the SHNA, that effectively transformed a monotone approach focused on height incentives alone to a nuanced urban development platform that is both supportive of development initiatives accretive to an enhanced neighborhood environment and supportive of office/mixed use development.”

The prohibition on hotels is just one aspect of the ordinance which provides a height increase to 65 feet for office uses on properties fronting Dade Boulevard between Alton Road and Bay Road, properties fronting Alton Road between 20th Street and Dade Boulevard as well as those fronting Purdy Avenue between 18th Street and Dade Boulevard. It would also eliminate the minimum parking requirement for non-residential uses above the ground floor while also allowing developers to provide parking for office uses above the ground floor up to the level required in parking district 1 without counting against FAR (floor area ratio) limits.

There are also limits on the number of lots that can be aggregated for retail, personal service or restaurant uses and maximum lot size for non-office developments.

Recommendations from the Neighborhood Vision Plan that were incorporated into the ordinance include requirements for a clear pedestrian path of ten feet, though the Design Review Board may allow for the path to be reduced to five feet, as well as ground level uses to provide neighborhood activation. There are also setback requirements above 55 feet and limits on height for rooftop structures.

In its letter, the Association urges the Board to transmit the ordinance to the City Commission at its meeting this week, citing the “zoning in progress” protection that would be provided to the neighborhood with a favorable transmittal. Without it, the association said, “Sunset Harbour will not have any of the comprehensive criteria or protections in place until the Ordinance is read at Commission, and therefore remains vulnerable to projects that do not include any of the setback, sidewalk width requirements, street animation criteria, roof top criteria or related requirements designed to foster an improved neighborhood environment.”

“The concern over the proliferation of hotel development in Miami Beach was the impetus for the City’s initiative to encourage office/mixed use development in Sunset Harbour in the first place,” the letter reads. “The SHNA understood the need for diversification and the perceived opportunity to capture office based development.”

“[T]he core impetus for the height increase proposed by the City of Miami Beach was to diversify the economy away from its dependence on hotel and leisure development by encouraging office/mixed use projects. The rationale for the height increase was that Class A offices require higher floor-to-ceiling spans to accommodate open office configurations and high-capacity HVAC systems. SHNA worked with the City to designate specific zones for this very purpose. Introducing a hotel within the zone established to diversify away from leisure sector investment is in direct conflict with the mission that led to the height increase and the designation of specific zones which best accommodate this use,” the letter states.

“[T]he proliferation of hotel properties will soon tally up to 548 rooms within an 8-minute walk of Sunset Harbour, not including Finvarb’s proposed suite hotel,” according to the Association. “These off-beach properties tend to draw younger traveler groups attracted by lower room rates and by suite hotels that allow for high room occupancy of up to 8 guests. Sunset Harbour is already experiencing the fallout of this travel sector drawn to neighborhood jet ski and motor scooter rental facilities that have created a negative impact on residents, restaurants and shops. Finvarb’s Suite Hotel product with in-room launderettes and kitchenettes would directly appeal to this travel segment, with its 36 suites able to accommodate up to 288 guests at full occupancy. Travel sector deterioration has become an issue of great consequence to Miami Beach, with serious impacts to neighborhoods exemplified by Deco District hotels on neighborhoods to the west and by the Mondrian Hotel on neighboring West Avenue residential properties.”

“Finvarb has proposed that their hotel could be made an ‘exception’ by carving out the subject property from Sunset Harbour,” SHNA writes. “This proposal does nothing to address the concerns noted above and will likely be viewed as spot zoning or contested as a shoestring annexation. Sunset Harbour risks having this project serve as a precedent rather than an exception, leading to additional hotel projects despite the consensus view of the neighborhood that hotel development will deteriorate our identity and quality of neighborhood life. In addition, it should be understood that there is nothing to prevent Finvarb from selling the land or bringing on an alternative operator (e.g., Motel 6), which given the saturation of the hotel market is not far-fetched.”

The Neighborhood Association said, “It was disingenuous for the Finvarb representative [Marrero at the March Planning Board meeting] to suggest that they were not informed of ongoing discussion, or that they were unaware of the multiple Public Meetings held to review the NVP and the Overlay Ordinance, or of the decision to target office/mixed use projects along Alton and Dade.”  

The question centers around when the hotel prohibition was raised. At the March Planning Board meeting, Rogelio Madan, Miami Beach Chief of Community Planning & Sustainability, said the hotel prohibition was not discussed until the February 10 City Commission meeting, ten days after the Finvarbs were locked into their contract.

In order to grandfathered in to current zoning law, the developer would have to have approved plans from the Design Review Board (DRB). While far along in the design process, that application has not yet been made and approval would be at least four months away which is why they are asking for an exception if the ordinance proceeds now.

Planning Board member Nick Gelpi said, “I like the [overall] ordinance” but added “I think [the Finvarbs are] responsible developers and I hate hearing about the timing of these things coinciding and I’m hoping we can do something to accommodate both.”

Member Mark Meland asked about potential litigation exposure for the City “when there’s certain reliance” on the zoning code. 

Assistant City Attorney Nick Kallergis said if the Planning Board transmitted the ordinance without the exception, “the prohibition on hotels would be enforced against everybody” with exceptions only for those that already have a DRB order or building permit.

“Whether the developer decides later on, assuming the City Commission does not carve them out, whether the developer decides to file an independent challenge to this legislation is a different story.”

Board member Alex Fernandez said he agreed “there are too many hotels in the city, but when a property owner or someone who is looking to buy property does due diligence, meets with the Planning Director, analyzes our Code before making a decision to purchase a property, that weighs heavily on me and that’s a concern I have. I want to be one hundred percent fully supportive of the NVP [but] they did their homework. They did their due diligence. They sat with the Planning Director, and now we’re telling them after they put money on the table, ‘Guess what? We’re changing the rules of the game.’ That to me, it’s concerning.”

Board Chair Kareem Brantley said, "I have an issue with the hotel…  I’d like to see more conversations with the neighbors. I’m really having trouble with that.”

According to The Real Deal, since the March Planning Board, SOBE 18 LLC closed on the property, paying $4 million.

The Planning Board item including the Staff memo, Neighborhood Vision Plan, the Sunset Harbour Neigbhorhood Association letter and timeline, and Marrero’s presentation of the hotel and requested exception can be found here.

Photo of Palomar Hotel courtesy Finvarb Group
Renderings courtesy GEK Architecture

Proposed Palomar Suites Hotel

View from proposed Palomar Suites Hotel with the Palomar Hotel across Dade Boulevard in background

The Palomar Hotel on left with vacant lot to the right that is proposed for a Palomar Suites Hotel

Palomar Hotel on left with rendering of proposed Palomar Suites on right

The Palomar Hotel

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